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After Volume Declines in 2009, PepsiCo Brand to Roll Out Athlete-Focused Prime, Recover Beverages Next Year

NEW YORK (AdAge.com) -- Gatorade is looking to innovate itself out of a sales slump and will spend some $30 million on product and packaging development to do so. The granddaddy of the sports-drink category is pushing forward with plans to introduce "G Series," a grouping of three product categories, while giving another facelift to its core product lines.

The company plans to offer three types of products, including two new beverages. New products will include Prime, which will be sold in 4-ounce pouches and come in three flavors. Prime is meant to be consumed just before exercise and includes carbohydrates, sodium and potassium. Recover, another new product, is meant to be used after exercise and will be sold in 16.9-ounce bottles, with three flavors and 16 grams of whey protein. Products to be consumed during exercise include the existing Thirst Quencher and G2 beverage lines.

"The whole sport-drink category was invented by Gatorade. The time has come for us to get back to meaningful innovation for the category," said Massimo d'Amore, CEO of PepsiCo's Americas Beverages group, at the Beverage Digest Future Smarts conference held today in New York. "For too long [the category] has relied on flavor extensions. It's time to really reset the clock, and that's what we're trying to do in 2010."

As part of the new product introduction, the core Thirst Quencher and G2 lines will also receive another facelift, the second in just over a year. Mr. d'Amore said the new packaging would be "more functional." The redesigned graphics will more prominently feature a low-calorie message for the G2 brand, which will have its calories reduced to 20 per 8-ounce serving, from 25. A spokesman declined to comment on the redesign of the Thirst Quencher products beyond saying that the brand is committed to G, the logo it introduced last year.

Arnell Group's Peter Arnell, who was behind much of the new beverage logos and graphics for PepsiCo, is not working on the new design. The coming redesign marks the second time PepsiCo has replaced designs introduced this year. Mr. Arnell's redesign of the Tropicana brand was scrapped by the company after less than two months on shelves.

What happened with G
Gatorade has said this year's marketing efforts are on track, but sales and market share both fell in the first half, when the "What Is G?" marketing campaign was most prominent in the marketplace. In the first half of this year, volume dropped 18%, according to Beverage Digest, while market share dipped four points to 75%. Year-to-date volume is down 14% for the brand.

While Gatorade had been attempting to appeal to a wider range of consumers this year through "What Is G?," the new G Series product line appears to be more keenly focused on athletes. The spokesman said the brand will continue to target a broader range of athletes, but it's not clear whether that push will be as defined as this year's efforts. Earlier this year the brand launched missiong.com, a site featuring social networking, gaming and several original reality series. Three of those series focused on dance and rap. It also ran an advertising campaign that featured elite athletes alongside everyday people of the same name for its G2 brand.

"When we announced the move to G, I said it would be a multi-year journey, and it is. This will probably be over a three year journey," Mr. d'Amore said. "Gatorade did extremely well for a long time, but in the most recent past it had become 'the sport drink of my father,' this is what teens said. This year we had 11 months of G in the marketplace, and for change as dramatic as this one, we're pleased with the results."

Still, the industry is anticipating Gatorade's 2010 efforts. Speaking at the Beverage Digest conference, Bill Pecoriello, CEO of Consumer Edge Research, said he's forecasting the sports-drink category will see 3% growth in 2010, following a year of double-digit declines. "We think sports drinks are up next year behind the relaunch of Gatorade and all of the spending that's going to happen in that category," he said.

PepsiCo will roll out the new Gatorade lineup throughout 2010, which could coincide with a larger Gatorade presence during the Super Bowl. PepsiCo's Pepsi brand may take a backseat, as much of its 2010 marketing is set to revolve around the "Pepsi Refresh Project." Mr. d'Amore supported that idea by saying that consumers will see athletes using new products on the sidelines as of the Super Bowl.

~ ~ ~CORRECTION: An earlier version of this story incorrectly stated Peter Arnell designed the G logo for Gatorade.